2017 (3) TMI 1587 - AT - Customs

Smuggling - silver bars - burden of proof - confiscation - redemption fine - penalty - Section 123 of the CA, 1962 - Held that - there is not even a whisper anywhere in the SCN or in the orders of the lower authorities that the impugned silver bars though bearing Indian markings are actually of foreign origin or that it is established with proof have been made out of re-melted foreign bullion which had been illicitly smuggled into the country - the provisions of Section 123 of the Customs Act, 1962 will not kick in - impugned order do not sustain - appeal allowed - decided in favor of appellant.

Summary

Issues:
Interception of silver bars in an Auto by customs officials, confiscation under Section 111(d) of the Customs Act, 1962, burden of proof on the appellant, imposition of redemption fine under Section 125, imposition of penalty under Section 112(a), appeal against the order of confiscation.

Analysis:
The appeal involved the interception of silver bars in an Auto carrying parcels/packages by customs officials. The appellant was found with 30 silver bars weighing 14.98 kgs, bearing the seal of JGR, Chennai, amidst other goods. The appellant was held liable for confiscation under Section 111(d) of the Customs Act, 1962, as the silver bars were covered under a notification issued under Section 123, placing the burden of proof on the appellant to establish that the goods were not smuggled. The original authority confiscated the silver bars, imposed a redemption fine of ?1,50,000 under Section 125, and a penalty of ?80,000 under Section 112(a). The Commissioner (Appeals) upheld this order, leading to the appeal before the forum.

During the hearing, the appellant's advocate argued that the silver bars were of Indian origin with Indian markings, not smuggled, as confirmed by the seller, M/s. Suresh Jewellers. On the other hand, the revenue relied on the assay results showing high purity of the silver bars. The assayer concluded that the bars were melted from high purity silver bullion. However, there was no evidence presented that the bars were of foreign origin or made from re-melted foreign bullion smuggled into the country, rendering Section 123 of the Customs Act inapplicable. The seller confirmed selling the bars on credit to the appellant, leading to the setting aside of the impugned order, including the confiscation, redemption fine, and penalty.

After considering both sides and the records, the forum noted that the silver bars bore Indian markings and had high purity. However, without evidence of foreign origin or illicitly smuggled bullion, the provisions of Section 123 did not apply. As the seller confirmed the sale on credit to the appellant, the impugned order was set aside, and the appeal was allowed with consequential benefits as per law.